Arthur W. Hatfield, Managing Director at Raymond James Financial, is “slightly bullish” on the transportation space. He says there has been capacity tightening, which has given companies pricing power, but the macroeconomy has to improve for the sector to rally.
In the current environment, he says stock picking is important, and he shares some of his top names:
Celadon Group (CGI): “Celadon, within the truckload space, was able to show a little bit of growth because of some acquisitions they had made, and also a good job on the cost and pricing front gave a good number.”
American Railcar (ARII): “Within the equipment side, American Railcar put up a very strong number, and that was really a result of discipline on the orders that they took into their backlog and producing on those orders with good cost controls.”
Greenbrier Companies (GBX): “We like the fundamentals of the railcar supply space, but one of the things is that Greenbrier has lagged the group. There are some concerns about their ability to produce numbers to the level of some of their peers, and I think to a little bit of a degree that’s justified, but I think, as a whole, the industry has performed well, and I think that they should be able to continue to perform well. As such, and the fact that it’s lagged, I think it will play a little bit of a catchup going forward. So that’s our current favorite idea.”
Top Picks in Internet Infrastructure
October 23, 2008